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Tag Archive: Lawyer

Ready For A Change In The Way Lawyers Bill You?

(This was first published on the Harrisonburg-Rockingham Chamber of Commerce website.)

For as long as there have been lawyers, there have been clients to whom lawyers seemed expensive.

In a world where you need certainty – knowing your costs, knowing your numbers – you never know how much you are in for when you pick up the phone to talk to your lawyer. You don’t know where it’s going to lead. Asking your lawyer a simple question might lead to unforeseen follow-up questions and “I guess I hadn’t thought of that” moments, and soon you feel like you’ve released the kraken.

Never has it been more true than now. In the grip of the COVID-19 pandemic, a company with reduced revenues and dependence on a PPP Loan to keep its employees for the next few weeks might come to a simple conclusion about the discretionary, non-emergency use of legal counsel – the conclusion being that it can’t afford it. The temporary drastic belt-tightening that everyone is doing now may lead some business owners to the conclusion that open-ended hourly legal bills need to be a thing of the past – at least their past.

Around the country, corporate general counsels – who, like any corporate managers, have to justify their expenses to senior management and boards – have been hinting, asking or outright requiring their lawyers to propose different ways of billing them. For smaller companies without inside GCs, the people responsible for hiring attorneys have come to their own similar conclusion. Many clients have heard about retainer arrangements, subscription models, flat fees, and similar alternatives to hourly billing before, but as COVID-19 squeezes budgets and clouds futures, companies are more and more asking their attorneys to actually propose these arrangements to them, and provide discounts in the interim. Lawyers are being asked, in essence, to invest in their clients. Some have called it a way for lawyers to “pay it forward” in a time of crisis. Others, like myself, view it as a permanent shift in the economic relationship between clients and their attorneys.

As Ben Gross, general counsel of retailer Rue 21, said recently, “When you have a good relationship with your outside counsel, they’re going to work with you in thick and thin.”

As an aside, I should note that even though hourly billing has fed lawyers for decades, the irony is that many (actually most) lawyers will tell you they hate billing by the hour. The mechanics of it, they will say, are tedious. So both sides have something they dislike about the hourly rate. Hourly billing is like the moon in that scene in Sleepless in Seattle, when Tom Hanks and Meg Ryan are both looking at it 3000 miles apart at the same time and thinking the same thing, except here instead of being in love its…well, it’s something else entirely.

There are real reasons why hourly billing has been the norm. Lawyers are ethically bound to not charge a client for work until it is already earned, in the absence of some other mutually understood arrangement. You do identified and authorized work, and then at the end of the month you send a bill.

But there’s never been a worse time (in least our lifetime) for major costs to be unpredictable in a business. It’s time for lawyers and clients to have conversation about other (and probably smarter) ways to work together.

Apart from lawyers getting paid by taking equity in a client that’s in a fast growth stage – a practice largely limited to Silicon Valley technology companies — there are two basic types alternative of legal fee arrangements. One structure is where a client pays a monthly fee in return for essentially unlimited access to lawyers in the firm, and the other is where a flat fee is charged a specific definable task. We began offering the first service – we call it OPENgc – four years ago, and we can attest that when lawyer and client spend the time to design an arrangement that works for the business, it’s an ideal way for the law firm to bring both certainty and immediate value to a lawyer-client relationship.

Flat fees for specific tasks, by definition, allow the client to budget legal services to the dollar. It’s a workable business model for lawyers who have the experience to predict what it will take to achieve a particular client’s goal — such as negotiating a loan or lease, purchasing or selling a company, drafting contracts, and other matters with a definite start and finish.

Both of these alternative fee arrangements push lawyers to work smarter and to really understand their clients’ businesses. This is a great thing, for both client and the attorney.
The uncertainty that surrounds business now, in the midst of this pandemic, amplifies the uncertainty that has challenged owners and executives forever, in good times and bad. Lawyers have been presented an opportunity to shut down the timeclock and take some of that particular fear off the table.

If you have questions about legal issues, the relative costs of legal work or just want to talk about your experience as a consumer of legal services, please contact me or any of our business lawyers.

Knowing Where to Start

Clients wonder sometimes what they are getting into when they ask a lawyer to draft a contract. Maybe their fear is that their attorney will sharpen up his metaphorical pencil, lean his chair back to think deeply on life and law for an hour or two (on the clock), and then pull out the laptop and sit down to drafts things up from scratch, like a composer writing out each note to a (very boring) symphony. The client may fear that the lawyer views every deal is different, that everything about every deal is new every time, that everything needs to be tailored like a bespoke suit.

Every deal is different, it’s often said – I’ve heard myself say it a hundred times. That’s because the facts are different, and that’s because no two people and no two companies are alike or have the exact same priorities. But that doesn’t mean that two deals – say, two leases of refrigerated warehouse space, or two agreements for the purchase of the assets of small businesses — happening 500 miles apart (or 5000 or 5) — can’t be done with forms of contract that are 90% the same.

In fact, they probably should be done that way.

And your attorney shouldn’t be spending a whole lot of time going for the Pulitzer Prize for creative nonfiction and drafting that 90% (just a percentage used for illustration purposes) from scratch.

Unless we are speaking of some sort of business deal where the industry is utterly new, the parties are utterly idiosyncratic, and the risk tolerances are off the charts (one direction or the other), or all of the above, the same basic forms work across the board. I remember Internet 1.0 – the days of AOL and Pets.com — and the ways that lawyers were trying to draft “application service provider” contracts that expressed the concept of software programs being accessed over the Internet (what we now call Software as a Service (SaaS)). But even in that time, when the Internet was beginning to utterly change the way the world operated, the contracts were pretty much built right on top of software, consulting, joint venture and financing contracts that had been around for decades before that.

The majority of the text in a contract from 1975 (the year of the room-sized computer) – for example, events of default, remedies on default, representations and warranties, indemnification, assignment, the boilerplate at the end, and the general flow and sequence of the document — was essentially the same as the text in a contract drafted in 2000 (the year of the Pets.com sock puppet). The same is even more true for commercial real estate contracts, and even holds true for many types of intellectual property agreements.

And it goes without saying that 90% of the text in an accounting SaaS services agreement from 2017 is going to be the same as a payroll SaaS services agreement from 2019.

Anyone who tells it differently is trying to create mystery where there really should be none.

That’s my candid and honest observation How does this insight relate to you?

As outside corporate general counsel, under our OPENgc service offering, GreeneHurlocker is keenly focused on saving a client time and money while still delivering the legal assistance a client needs, when they need it. We avoid reinventing wheels. We’ve been practicing enough years, in widely varying industries and for companies of all sizes, to have an experienced, intuitive sense of what works and what doesn’t, and how the work we’ve done before may apply to the work we are doing for a client now. When a client picks up the phone and asks for an individual contract to be done or an entire deal to be quarterbacked, the client can rest assured we are not starting from scratch. Instead, we’re applying all the knowledge and work we have already done.

We’re here to guide you to the end of your deal. But we also know where to start.

Brian Greene Again Listed as Legal Elite

January 8, 2015, RICHMOND, VA — For the seventh consecutive year, Virginia Business magazine has recognized Brian R. Greene, co-managing partner of the Virginia-based GreeneHurlocker law firm, as one of its Legal Elite.

Greene’s recognition in the Legislative/Regulatory/Administrative Law section of the publication reflects his long-term practice in utility regulation and energy law, an area he and his partners have been developing for nearly twenty years.  The list is compiled by the votes of members of the Virginia State Bar and organized and sponsored by Virginia Business magazine.

Greene has helped create many of the governing rules in utility distribution and rate regulation over the years of his regional regulatory law practice throughout the mid-Atlantic. This is why he maintains a diverse and sophisticated regional energy practice, representing a wide range of clients in several jurisdictions.